Local News

Still Debate Over Sales Tax For Computer Companies

BALTIMORE (WJZ) ― The long debate over a sales tax for local computer companies continues.

As Gigi Barnett reports, some businesses are looking to pack up and move out of the state if the tax isn't repealed.

Clicks on a computer keyboard are the sound of John Eckenrode's livelihood.  But for the state, Eckenrode says it sounds more like chi-ching.

"We were the straw dog ripe for the picking," he said.

Eckenrode is the president of CPSI, a computer staffing firm in Catonsville.  He's talking about the looming sales tax on computer services called the "tech tax."

State lawmakers approved it late last year during a special session to cover a budget shortfall.

Eckenrode and hundreds of others are now facing a six percent sales tax that could cut deeply into their profits.

"We can't afford to stay here.  We will have to do something," he said.

And surrounding states know it.  Virginia, Pennsylvania and Delaware are all courting computer companies with brochures and letters.  The suggestion to consider those states is clear and Eckenrode may take them up on it.

"If Maryland doesn't love us anymore, then why stay around?" he said.

The state could raise about $200 million with the computer tax, which goes into effect on July 1.  But computer companies like CPSI may not wait until then to find a new home.

"There is no doubt about that.  If this thing spins the wrong way and we don't get the relief we want in this general session, we have to go.  We have no choice," Eckenrode said.

Computer companies are rallying help to turn the tax around. 

Although Governor Martin O'Malley supports it, there is already a bill in the House of Delegates repealing the "tech tax."

"If we got a full repeal, I think I'd be delighted to stay right here," he said.

Many computer companies can pack up and ship out in a matter of hours because they have large amounts of information stored on mini computer drives.

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